Plaintiffs in Tuberville securities case oppose partial stay

The plaintiffs in the securities fraud case against Tommy Tuberville and a former partner in a hedge fund are encouraging a federal judge to reject the Texas Tech football coach’s request to halt further depositions in the case until partner John David Stroud’s criminal case in Alabama state court is resolved.

Their response to Tuberville’s motion, filed in U.S. District Court in Opelika, Ala., on Wednesday, argues that waiting for the conclusion of a criminal action against Stroud for securities fraud “could be a very long stay indeed.”

Attorneys for the plaintiffs say that “long stay” could occur because a person’s Fifth Amendment right against self-incrimination in a case doesn’t end with a conviction.

“Stroud could persist in his assertion throughout any appellate process and delay this case for years,” the plaintiffs’ attorneys wrote in the pleading. “Such a delay would be unfairly prejudicial to plaintiffs and utterly unnecessary.”

In addition, the motion says, Tuberville’s request doesn’t show he would be unable to support his defenses with other evidence, testimony of other people or even his own statements.

Tuberville’s attorneys asked for the delay earlier this month, saying Stroud — who took the Fifth Amendment on every substantial question he was asked in a deposition on a related suit filed by the U.S. Commodities Trading Commission — would likely invoke his right against self-incrimination at any depositions in the civil case where he and Tuberville are co-defendants. And, Tuberville’s attorneys say, Stroud has information they believe is essential to his defense.

Tuberville’s attorneys did not respond to a request from the Avalanche-Journal for comment for this story.

Seven people sued Stroud, Tuberville and several Stroud investment fund partnerships in February alleging securities fraud. Since then the complaint has been amended twice, and grown to eight plaintiffs.

He also is not named as a defendant in the criminal indictment a Lee County, Ala., grand jury handed down against Stroud in May charging Stroud with acting as an investment advisor without a license, using money from new investors to pay returns to existing investors, distributing false account statements to investors, and misrepresenting material facts to individual investors.

To comment on this story:

walt.nett@lubbockonline.com • 766-8744

leesha.faulkner@lubbockonline.com • 766-8706

Standing alone

The plaintiffs’ latest pleading also raises the possiblity that in some ways, Tommy Tuberville is very much alone in his own defense in the lawsuit because his business partner, John David Stroud, has appareently absented himself from the case.

According to the motion, the plaintiffs have been unable to serve Stroud with the most recent amendment to the suit, and the attorney who was representing Stroud and the corporate entities “is no longer authorized or willing to accept materials” for Stroud or the corporate defendants.

Some of the corporate defendants were limited liability companies incorporated in Delaware, but no longer have registered agents — a person designated to accept service of legal documents.

In those cases, the Delaware secretary of state’s office accepted service of the paperwork.